Value Line: Now would be an opportune time to accumulate Apple

From Value Line’s Dec. 28 report on Apple:

Apple stock has been in retreat mode since the tech giant posted results for the fourth quarter of fiscal 2018 (ended September 29th). Those results actually exceeded expectations, with share net of $2.91 coming in ahead of our $2.74 estimate and Wall Street’s consensus view of $2.78. But guidance for the December interim was on the light side, owing main- ly to currency headwinds (i.e., the strong U.S. dollar) and challenging conditions in select emerging markets, including Brazil, India, and Russia. And…

Investors appeared displeased with the company’s decision to no longer disclose unit sales for its iPhone, iPad, and Mac platforms. Some Street analysts are taking this accounting change to mean that shipments of the iPhone, long Apple’s cash cow, have peaked globally, and that year-over-year declines are likely on the way. The change seems to make sense, however…

We see share net climbing 15% in fiscal 2019, to $13.65, and reaching the $22.00 mark by 2021-2023. Revenues will probably advance at a solid clip in the coming periods, as sales of the latest iPhones (the XS and XS Max models) drive ASPs higher, and as the company leverages its huge installed base to further expand its high-margined services business….

Now would be an opportune time for investors to accumulate this timely Dow component. Despite the recent negative sentiment here, we still envision the mega-cap stock trading into the $280-$380 range by early next decade.

Click to enlarge. 

My take: Value Line, founded in 1931, is old school. The company’s brand—”The Most Trusted Name In Investment Research”—is registered as a trademark.

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